You might consider buying a second property if you already own a house, there are plenty of reasons why.
Possibly you’re eyeing up a holiday that is nice regarding the coastline, or a good investment home to rent. Or even you need to purchase an accepted destination you’d love to reside in down the track, or if maybe maybe not you, your children.
Utilizing the equity in your present house makes it possible for you to definitely purchase that 2nd home without a money deposit.
What exactly is equity in a house?
In summary in only a words that are few your equity in a house may be the value of the house minus just how much you borrowed from in the home loan linked with it. In summary much more terms, we’ll use an instance.
Example: Augustine triples the equity in her own household over a decade
Augustine purchases a property for $500,000 with a 20% deposit ($100,000 of her very own cost savings) and a $400,000 mortgage. Her equity into the home only at that point is $100,000.